I’d created the VHDs as dynamically sized VHDs. I blew these away and created fixed size VHDs and attached them to the VMs. I’ve been repeatedly performing full distribution installs without error. I managed to find a Hyper-V R2 box without SP1 and couldn’t replicate the install problem with dynamically sized VHDs, so Microsoft have introduced a problem with SP1.

If you’re seeing disk-related problems with your UNIX/UNIX-like VMs on Hyper-V, check to see if you’re using dynamically sized VHDs and convert them to fixed size VHDs to see if this fixes the problem.